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Canadian Bankers Association now calling for bank mergers....good grief.....why am I not surprised?
Globe: No-merger rule ‘out of step,' bank group says
Sure why not strike when the iron is hot.........Harper is in the business of wrecking the country....he takes all his marching orders from the bank dominated CCCE. This has got to be good for Manulife and Power Corp who can parlay this to their benefit. Let's have bank mergers followed by massive layoffs in a field of high paying jobs, with high multiplier effects. That way it’s easier for Goldman Sachs and Wall Street to fill the newly created void. Do you suppose Mark Carney is supportive? He’s a newly minted banker now. Hey, let's consolidate more risk in to the hands of fewer institutions , that way CIBC can bring the economy to the brink instead of just themselves every five years or so along with the virtues of less competition and less need for innovation.
Here’s a novel thought. If we've had five major banks for the past 30 plus years, and the country has grown by 50% over that time, why do we need fewer banks going forward? Doesn't compute. Meanwhile how do Canadians possibly benefit from the argument for banl mergers, that they need to be able to expand internationally? What does that do for the Canadian back on the farm, apart from expose our Canadian banking system to the ways of international banking. Subprime mortgage lending anyone? Enron off balance sheet lending anyone? Has anyone ever heard of the concept of "if it ain't broke, don’t fix it?".
Soon Flaherty's work will all be done. Meanwhile Canada will have gone down the drain. Here's an idea. Why don't the banks dividend out their excess earnings to shareholders who can reinvest it in our own country in the manner they think best serves their needs? Oh yeah, they're only the owners and not the omnipotent managers.
No-merger rule ‘out of step,' bank group saysSTEVEN CHASE
Globe and Mail Update
January 10, 2008 at 9:47 PM EST
[ 10 January 2008: Message edited by: Brent Fullard ]
Why close the barn door when the horse is already loose? Canadian banks are exposed via their headlong rush to buy American banks.
Canadian deposits are supposedly safe in Canadian banks but with the recent financial crisis,one can only hope.
It is interesting to note that the US giant Citigroup will not survive. It will not be allowed to go bankrupt but it will instead be broken up and parcelled out with the caveat that this is "business as usual- no worries".
It seems to me that the rise of the dollar pretty much deflated any desire for the Canadian big banks to merge with each other: buying up US banks has become 30% cheaper in the last three years. With a possible US recession and the recent subprime mortgage financial crisis, the fire sale may even make them more than 30% cheaper.
Since bank mergers were blocked by the feds several years ago, the Canadian big five have been looking south of the border for acquisitions (for example, see this [url=http://www.canadianbusiness.com/managing/strategy/article.jsp?content=20...).
Of course, Canadian banks are still always going to push the government to deregulate, that is, except when the regulations are in their favour. Maybe they're hoping that, with Conservatives in power, now is the right time to make the push.
Either way, it's bad for the consumer. It's why I use credit unions as much as possible.
[url=http://www.ndp.ca/banks][b]Judy Wasylycia-Leis' letter to Finance Minister Goodale on Bank mergers[/b][/url] (long list of grievances 2005)
She concludes with:
Canadians have determined that banks are not corporations like any other. We have provided a unique charter system to ensure the stability and viability of these banks. In return, Canadians expect that we have access to the financial tools necessary to both day-to-day living, and encouraging economic growth in the 21st Century. Banks may think they have outgrown that social contract. New Democrats do not, and look forward to a substantive discussion of the government’s vision for the banking industry should the government feel it desirable to find one.
Maybe banks would be willing to open the doors to other banks, in the name of competitiveness? Or perhaps their multibillion dollar profits from their legislated monopoly actually pleases them, and the 'free market' is not actually desirable.
I was glad when Paul Martin killed the mergers 10 years ago. I see absolutely no reason to change my position now.
The biggest casualty in any Canadian bank merger will be the loss of branches in smaller service areas. Banks presently will lose market share if one closes a branch in a given area and another doesn't. A merger will close both branches in service areas that have no other competition and one in areas that do,either forcing customers to rely on internet/phone banking or driving to the closest branch.
The second casualty will be jobs. The synergies of a merger coupled with an embrace of new technology (that some banks are lacking) will mean the loss of thousands of jobs in vulnerable areas and in (middle) management ranks.
Mergers are a very attractive area for banks to gut their costs by getting rid of the long term employees who will cost them the most in future.
Post-merger banks will emulate their foreign competition like ING with virtual banks that have no job or community committments.
Jester, the small branches are long gone in many rural communities, since the mid nineties at least. They once were the centre of towns, the buildings remain, but the service is long gone, replaced by Credit Unions. I have no problem with credit unions generally but in small communities and with staff coming and going I am concerned about privacy.
Grinning and bearing it again, the price for living in a small community.